Retail Sales in U.S. Unexpectedly Declined in July (Duh?)

[brentspeak]

Source: Bloomberg

By Timothy R. Homan

Aug. 13 (Bloomberg) -- Sales at U.S. retailers unexpectedly fell in July as a boost from the cash-for-clunkers automobile incentive program failed to overcome cuts in other spending.

The 0.1 percent decrease in sales, the first drop in three months, followed a revised 0.8 percent gain in June that was larger than previously estimated, Commerce Department figures showed today in Washington. Purchases excluding automobiles fell 0.6 percent, also more than anticipated.

Today’s report underscores the threat to spending from the continued deterioration in the job market; a separate government report today showed more Americans than forecast filed claims for unemployment insurance last week. Retailers such as Wal-Mart Stores Inc. and Macy’s Inc. are cutting costs and inventories to bolster profits as households cut back on non-essential items.

“Until we start seeing job growth, consumers are still going to be very cautious,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, which accurately forecast the drop in purchases excluding automobiles. “It’s premature to talk about the sustainability of a recovery,” he said, until there’s “follow-through on the demand side.”

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aqQ7lelIST9g

[Steerpike]

1. I don't get it...

Why don't they see? I'm not being cautious...I'm spending every cent I make...I just don't make that much. I was rooting through some old paperwork last week and I found a pay stub from about 10 years ago. I'm bringing home about the same amount of money. I'm actually making a couple thousand more a year, but my insurance premiums and taxes have gone up about the same amount. I've also gone from paying about 400 a month for housing to paying 1290 a month. I used to get about 100 dollars worth of groceries every couple of days...now I go to the grocery store and spend 150 on 5 to six small bags...and lets not talk about the cost of gasoline and utilities! How am I supposed to spend money on big ticket items when the small amount of money I make is gobbled up by inflation every year?

[canoeist52]

9. great post, Steerpike. I've been keeping track of family finances

I've been keeping track of family finances through Quicken for since 1999. Everything has practically doubled but our income has stayed about the same.

Health Insurance- used to be $30. for a family a week- now $87. for lousy insurance with yearly and lifetime caps. (Co-pays $5 -$25 more than doubled)

Prescriptions $9. -$26.
Home Owners Insurance $66.- $116.
Heat $56.- $80.
Electricity $27. -$66.
Groceries $320.-$600.
Phone $22.- $42.
Trash Fee $50.- $114.
Real Estate Taxes $205.-$287.

Not to mention that TV used to be free
or lost company matching funds in 401K

[AnneD]

11. Another way prices have gone up....

You pay the same price for cereal that you did last year but instead of getting 26 oz., you now get 20 oz. Most consumers don't notice this but if you shop by unit price like I do....you pick up on that right away.

I hate it when they do that. It is like putting your thumb on the scale.

[bemildred]

2. Dang, these expecters keep expecting wrong.

Maybe we need to get better, more accurate expecters.

[PSPS]

3. But the Dow is up, so this must be the green shoots! Right?

Since the rigged stock market casino is up, I'm sure that will be the focus on the MSM today.

[truedelphi]

12. to steal another more enlightened (than me) DU'ers idea:

The green shoots help the pandas a lot.

People not so much.

[fasttense]

4. Until we get jobs back in the US of A, we are not going

to see any sustain recovery of the economy. Our GDP, before the 2nd Republicon Great Depression, was 70% consumer spending. Without JOBS those consumers can't spend, especially when the middle agers have borrowed on all their home equity. Wages have always driven demand in the US economy, especially when consumers have tapped out their equity in their homes. When wages and jobs shrink so does demand. Simple, strait froward, obvious.

You want to see a sustained improvement in the US economy? Simple, create lots of well paying jobs.

[Stumbler]

8. Agreed! Too bad our 'reps' don't understand 'logic' and 'common sense'

For years, our corporate overlords have been working very hard at "improving profitability" by "cutting costs," usually at the expense of the average American worker, aka "the consumers." Even though executive pay and bonuses manage to stay well-ahead of inflation, the workers on the bottom rung are competing with outsourced jobs to low-paid Asian workers, off-the-books illegal immigrants, and the ever-present "need" to work more hours for less money, in the name of "increased productivity."

As a nation, our productivity has never been higher. And "as an average," American wages have never been higher. The problem is the fruits of our labor has been accumulated into the hands of the upper 1% of our society. Each year the top 1% becomes richer, while 90% of us consider ourselves lucky to make the same pay we did last year. We need to make a few simple changes in our economic policies, but sadly, nothing will change until we get corporate money out of our government.

For example, we can change our trade tariffs. While most other industrialized nations charge 20% to import goods, we charge 2%. This directly undercuts the cost of domestic labor, leading to outsourcing and reduced pay at home. when we raise our tariffs back to 20%, the "value" of outsourced labor will diminish, bringing jobs back to America.
We can also repeal the Regan tax-cuts. If we place a 70%+ tax on personal income over $3.2 million, the CEOs and executives of our major corporations will find it "more profitable" to reinvest in their companies, rather than giving themselves $20, $50, or $100 million annual salaries. This reinvestment in the business can go towards raising wages of existing employees, and hiring new employees, which will lead to *gasp* increased consumer demand for consumer products.

It's time for 'trickle-down,' voodoo economics to die. Giving money to those who already have wealth simply lines their pockets further. Giving money and opportunities to those in need creates "consumer demand" which leads to a need to produce, which leads to jobs for those who can produce, which inevitably leads to profits for the executives anyway. It's all so simple.

[canoeist52]

5. What part of "Can't spend what you dont have" do they not get?

[bemildred]

6. They seem to think that "consumers" and "employees" are distinct groups. nt

[tocqueville]

7. it means that the decline had been even worse

if the cash for clunkers hadn't been implemented.

[AnneD]

13. Even though we qualify for the cash for clunkers ......

we are afraid of giving up our 2 paid for running cars to take on debt. We are employed today but will we be employed tomorrow? I don't want to be unemployed with a big debt hanging over my head.

[dixiegrrrrl]

10. a 1,000 words

more details at Deninnger this morning: 2nd article down the page.

http://market-ticker.denninger.net/archives/P2.html

[Greyskye]

14. I practically used to keep the local bookstore in business.

I haven't been there since last January. :(

[quiller4]

15. One really needs to look at regional figures because some

areas off the country are clearly bouncing back faster than others with both jobs and sales. The unemployment data varies radically and so does sales data. In my state sales tax collections were up substantially in July for the first time in 10 months but in California sales tax revenue is still dropping.

[xchrom]

16. americans need jobs and a significant py raise.

it drives me NUTS that the experts have watched wealth go by the ton to the upper echelons of society -- and never a sigh about inflation when they make more -- but oh how the PANIC sets in if you or i get a pay raise.

why is the exponential gathering of wealth in the top ten, five or one percent of the country not a cause of inflation concerns -- but if i make more it is?